Disney Huddles with FCC

11/09/2004 9:35 AM Eastern

By: By Ted Hearn

Executives of The Walt Disney Co. huddled with Federal Communications Commission leaders and staff in a series of meetings last week designed to give the media giant a forum to air its views on two hot topics: a la carte pricing and retransmission consent.

The FCC has a Nov. 18 deadline to provide Congress with a report on the feasibility of providing cable networks a la carte on a retail basis.

The a la carte debate has galvanized the cable-programming community, including Disney, based on fears that the unbundling of expanded basic would decimate advertising revenue, among other alleged ills.

Disney attacked an a la carte proposal favored by the American Cable Association, the small-MSO consortium that has complained about carriage terms and conditions offered by Disney, Viacom Inc., News Corp., General Electric Co.’s NBC and Time Warner Inc.

The ACA wants the right to purchase programming a la carte wholesale on reasonable terms, but without having to retail the programming in that manner. Rep. Nathan Deal (R-Ga.) has called this approach “voluntary” a la carte.

In an FCC filing, Disney mocked voluntary a la carte, saying that it would be voluntary only for cable and satellite operators.

“The proposal for `voluntary’ a la carte would insert a regulatory directive into the negotiating process between programmers and [distributors] that dictates to programmers how their channels could be sold,” Disney said.

Disney executives held meetings with FCC members Kevin Martin, Jonathan Adelstein, and Kathleen Abernathy Nov. 4. They also met with senior aides to FCC chairman Michael Powell and FCC member Michael Copps.

Time Warner recently called for reform of retransmission consent, which allows TV stations to withhold their signals in carriage talks with cable operators. The MSO said retransmission consent is forcing cable to carry more and more broadcast-affiliated networks, crowding out other programmers and causing cable rates to rise.

Disney said there was no reason to change retransmission-consent policies. “The law confirms that content creators are entitled to compensation for their work,” the company said.

Disney added that cable companies can purchase the ABC signal from Disney without having to purchase any Disney-owned cable networks. Disney said the price for the ABC signal is much less than the real market value, which it pegged at $2-$2.09 per subscriber, per month.